BHOR INDUSTRIES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference two questions have been referred to us by the Tribunal one under S. 66(1) of the Indian IT Act and the other in compliance with the requisition of this Court under S. 66(2) of the Act.

(2.) THE assessee, Bhor Industries Limited, is a private limited company incorporated in the former Indian State of Bhor. The assessee was desirous of introducing new industries in the Bhor State and for the said purpose an agreement was entered into between the assessee on the one hand and the Diwan of the Bhor State, representing the Bhor Darbar on the other, on 18th Feb., 1943. The material terms of that agreement are in the following terms : "1. The State agrees to give to the party of the second part (the assessee) or to any other companies that may be formed by the party of the second part, the sole monopoly for starting and working a factory or factories for proofing of cloth of various types and that the State will not grant any licence or permit nor will it allow any other person, firm or company or other association, to manufacture articles similar to the articles manufactured by the party of the second part for a period of at least ten years from the date of the starting of the industry.

(3.) ON an application made by the assessee, the Tribunal drew up a statement of the case and referred the following question to this Court under Sub -S. (1) of S. 66 of the Act :